Jonathan Brearley regularly talk to customers so he knows that many readers will be extremely worried about rising energy bills. This is a difficult time for many households.
Customers struggling to pay for their energy may be eligible for extra help such as debt repayment plans, emergency credit for prepayment metered customers, priority support, and schemes like the Winter Fuel Payment, and Brearley would encourage anyone struggling with their bills to get in touch with their energy company to see what support is available as soon as they can.
Shocked and heartbroken
At the same time, like so many Ofgem is shocked and heartbroken by what is happening in Ukraine, and by the immense suffering of the Ukrainian people as a result of the Russian invasion.
Many of the people have relatives and friends who are caught up in this conflict, and Brearley wants to make it clear that Ofgem is doing whatever is needed to support the UK government in executing its strategy on economic sanctions against Russia.
Low-carbon domestic energy system
This war will undoubtedly change many things about the world. All of them is not yet known, but it is already clear it will have long-term impacts on fuel prices, gas prices, and the energy sector as a whole. This makes Ofgem’s mission to protect the interests of consumers, ensuring a secure supply of electricity and gas, and helping the country make the transition to a low-carbon domestic energy system, at least cost, more important than ever.
To make this transition happen, billions of pounds needs to be invested to upgrade the electricity network: to accommodate a nation-wide network of electric vehicle charging points as one move away from petrol and diesel cars; increasing the grid capacity to power heat pumps as transition happens from gas boilers; upgrading the transmission network assets to get new low carbon energy from where it is generated to where it is in demand; and making power supplies more resilient to more frequent storms, such as those seen this winter.
Virtual open hearings
Ofgem will strike a landmark settlement with electricity distribution network companies
Ofgem will strike a landmark settlement with electricity distribution network companies to help deliver this investment. Since this will ultimately be paid for by customers, Ofgem is determined to get the best deal possible, and throughout March virtual open hearings across the country are held, enabling consumer groups and other stakeholders, alongside us, to scrutinize each company’s spending plans.
The hearings attracted over 750 interested parties, dialing in to hear the network companies take searching questions from Ofgem, consumer representatives, environmental groups, representatives of large industrial energy users, electric vehicle organizations, as well as county, local, and city authorities. Ofgem want to make sure the voice of consumers is heard, and that stakeholders can probe these companies’ plans and highlight weaknesses.
Think differently
As these investments are made, Ofgem needs to be ready to think differently about energy – how to insulate homes, use energy more efficiently, and harness the power of new technologies. A smarter, more flexible grid will give consumers more control to save money through better data and more regularly updated prices for peak and off-peak demand.
It will also enable smart gadgets that draw energy from the grid at cheaper rates when demand is low, supporting the roll-out of low-carbon technologies like electric vehicles. These changes will reduce the need for costly new generating and grid capacity, in the long term could save customers up to £4.5 billion a year, helping keep bills down and achieving our climate change goals at the same time.
Value for money
It is extremely important that Ofgem’s network companies can demonstrate value for money
Given the extraordinary pressure on household bills, it is extremely important that Ofgem’s network companies can demonstrate value for money. In the lead-up to the publication of the draft determinations in the summer, Ofgem will continue to take forward a tough settlement process and provide a strong challenge to the network companies where their plans fall short or are not fit for purpose, driving the right decisions for consumers.
Ofgem cannot control volatile global gas prices, and sadly it cannot be pretended that customers from the full impact of rising energy bills today can be protected. But it can be assured to the customers that by pressing ahead with plans to build a low carbon, more resilient, energy system at the lowest cost, Ofgem is working hard to insulate customers from future price shocks tomorrow.
